Standing Committee D

[Mr. George Stevenson in the Chair]

Employment Relations Bill

Clause 17 - Information about employees to be ballotedon industrial action

Henry Bellingham: I beg to move amendment No. 8, in
Clause 17, page 16, line 42, leave out 'or employee' and insert ', employee, branch or section'.

George Stevenson: With this it will be convenient to discuss amendment No. 9, in
Clause 20, page 18, line 21, leave out 'or employee' and insert ', employee, branch or section'.

Henry Bellingham: I must declare an interest, Mr. Stevenson, which is shown in the Register of Members' Interests. I was a lawyer in a previous incarnation, and I might have taken various legal cases on this subject. I have no intention of going back to the law—unless my constituents summarily dismiss me. After my experience with the Bill, however, I might be more employable than before.
 Amendments Nos. 8 and 9 are in my name and that of the hon. Member for Huntingdon (Mr. Djanogly). Proposed new subsection (2D), in subsection (4), states: 
''For the purposes of subsection (2C) information is in the possession of the union if it is held, for union purposes—
(a) in a document, whether in electronic form or any other form, and 
 (b) in the possession or under the control of an officer or employee of the union.''
 Our understanding is that that basically means the officers or employees at a union's headquarters and not at branch level. I would like the Minister to clarify that. 
 If branch officers are not included, it must be an oversight. The unions should have extremely efficient book keeping systems, and employers are required to provide the equivalent information. The provision makes no exception for poor administration or poor book keeping. Some employers might be concerned about that. It is up to us as legislators to consider abnormal or extreme cases. We obviously hope that they will not happen but they could in fraught situations. The concern is that, if the clause does not include a reference to branch officials, unions might be encouraged to hide information with them. 
 I wonder whether the Government want to restrict the provision to officers and records at a union's headquarters. That is the purpose of the amendments.

Gerry Sutcliffe: Good morning, Mr. Stevenson, and welcome to the Committee.
 The hon. Member for North-West Norfolk (Mr. Bellingham) asked what the Government's intention is. I shall deal with both amendments as they would make the same change to clauses 17 and 20. Both clauses deal with the law on industrial action notices. Clause 17 concerns the notices that unions must provide in advance of industrial action ballots, and clause 20 deals with notices that unions must provide in advance of any subsequent industrial action. 
 The present law is far too complicated. It places unrealistically high demands on unions, and opens the way for legal action over relatively minor breaches of the law. Clauses 17 and 20 therefore make several important simplifications. For example, we have made it clear in our provisions that the union need supply only that information that is in the possession of, or accessible to, union employees or union officers. That formulation ensures that unions are under no obligation to assemble and present information held by their lay officials around the country—the point raised by the hon. Gentleman. 
 The requirement is therefore confined to what the union can realistically be expected to assemble—namely, information held by, or accessible to, the main officers and staff of the union. For a larger union, the definition would cover the information held at head offices or at any of its regional or district offices from which its full-time officers operate. That will often be a large network. 
 Amendments Nos. 8 and 9 seek to widen considerably the information that is to be regarded as being in the possession of the union. The hon. Member for North-West Norfolk proposes extending the definition to include information held by every union branch and section. He seeks to ensure that information held by shop stewards or branch officials up and down the country must be used by the union when preparing the notices if it is relevant. For large unions, we would be talking about thousands of individuals and locations. 
 I do not know whether the hon. Gentleman has ever been an active trade union member. Perhaps he has been—after all, lawyers have one of the best trade unions. [Hon. Members: ''A closed shop.''] Yes, it is a closed shop. However, I am not sure whether he has ever been an active trade union member. If he had been, he would understand the severe limitations on most part-time secretaries and similar lay officials. 
 Volunteers who work in union branches and sections rarely have much, if any, office equipment. They work part-time, spending a few hours a week on union business. Their rights to paid time off to conduct that business may be limited, especially if the union is unrecognised. Not surprisingly, their ability to maintain accurate and up-to-date records is limited, as is their ability to communicate that information to a full-time official in a usable form. 
 That is not to condone inefficiency or sloppy working in unions, and I am sure that we shall return to that point in later discussions. Our approach is based on the reality of life in voluntary organisations. The obligations on unions should be 
 framed accordingly, rather than on the basis of the circumstances in which employers operate. That is why the scope of the duty on employers in clause 3 to disclose information is different. 
 I propose that notices should be based on information with which the union can realistically be expected to provide the employer. The definition of ''qualifying information'' is still wide and includes all the main data held by unions. The requirements will ensure that the employer's essential needs are met without placing an unnecessary burden on the unions. I therefore ask the hon. Gentleman to withdraw the amendment.

Jonathan Djanogly: Having heard the Minister describe the situation on the ground, I have more concerns than I did before he spoke. The concept of holding information is becoming increasingly important. The Data Protection Act 1998 provides that people must register the fact that they hold information. However, the Minister said that people might be able to lose information in the back office because they were part-timers or voluntary workers. That is not acceptable. Nor does it reflect data protection law. Following the Minister's remarks, I have serious concerns that the clause could be used to shuffle aside information that should be seen but which the unions do not want to be seen. Has the Minister checked whether the clause adequately reflects data protection law?

Gerry Sutcliffe: I wish the hon. Gentleman a good morning, too. I note that he consistently returns to his theme of the dark intentions behind what we want to achieve.
 It might be worth putting the issue in the context of current industrial relations, although I do not want to go into the historical context and the dark days under the last Conservative Government, and you would not let me, Mr. Stevenson. Stoppages are at an all-time low, and industrial relations are better than ever before, because the partnership arrangements that the Government have put in place are working better than ever. 
 I was not being flippant about the serious issues raised by the Data Protection Act. The relevant information will, as the hon. Member for North Norfolk said, be required a minimal amount of times. It will involve only that information that it is reasonable to expect a union to provide on the ground. The original definition in the Employment Relations Act 1999 has been shown to be too tight. We have tried, as we said we would, reasonably to examine how the Act was working on the ground. 
 The proposed change is sensible. It does not prevent employers from gaining the information that they require, it meets all the legal requirements of data protection and other provisions and it is perfectly sensible, but I clearly have not convinced the hon. Member for Huntingdon.

Jonathan Djanogly: I am not convinced by the Minister's argument. I think that he said that the proposals
 complied with data protection law, but there is another strand to the issue. From what I can make out, there is no equivalent provision for companies. Am I correct in assuming that, if a piece of information were hidden in the corner of a part-time employee's office, the company would not have the same leeway as the Minister proposes to give the unions?

Gerry Sutcliffe: The hon. Gentleman should remember the context. We are talking about information relating to possible industrial action. The employer has all the information to hand in such circumstances. This is about what the union has to give the employer. The onus is therefore on the union to provide the information. The Government argue that the amount of information held by the full-time officer must be reasonable.

John Lyons: Have employers made any complaints about statistics provided by trade unions in this situation? I have always found the process to run smoothly. Names are supplied, whether people are manual, non-manual or clerical workers, which is usually enough for employers to feel quite comfortable and confident about the information that they are receiving. I am not aware of any complaints, but the Minister might tell us otherwise.

Gerry Sutcliffe: I assure my hon. Friend that there have been no complaints. The procedure works reasonably well, but we are taking the opportunity to improve it. Throughout our proceedings, it has been clear why the hon. Member for Huntingdon is unhappy with the Bill and the motivation behind it. I understand his arguments, although we disagree. The amendments are not appropriate, as they would take the Bill in the wrong direction. At this early point in our discussion, I ask the hon. Member for North-West Norfolk to withdraw the amendment.

Henry Bellingham: I want to make a quick extra point. A factory closed in my constituency when the company went into receivership, and many employees were laid off. The company was bought by a Belgian company. I had many discussions with the Transport and General Workers Union branch officer and with T and G stewards in the factory. I presume that the branch officer, who is based in Cambridge or Peterborough, will be a full-time employee of the union and would be covered by the provision. The Minister appears to be saying that the stewards in the factory would not be covered. Obviously, stewards in the factory have a great deal of information, but they are employees of the company and work voluntarily for the union. Am I right that the full-time employee of the T and G, whom I met at various meetings, would be an employee of the union for the purposes of the Bill?

Gerry Sutcliffe: As I understand it, yes.

Henry Bellingham: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

Henry Bellingham: I have some important questions to ask the Minister. The Opposition tabled an amendment that the learned Clerk tells me would go to the core of the clause and change it fundamentally.
 The wording of the original statute is: 
''containing such information in the union's possession as would help the employer to make plans and bring information to the attention of those of his employees''.
 That is to be replaced by subsection (3), which states: 
''containing the lists mentioned in subsection (2A) and the figures mentioned in subsection (2B), together with an explanation of how those figures were arrived at.''
 I conclude that the new wording is intended to reduce uncertainty about what information the unions are required to give employers. That obviously makes sense. However, the Opposition strongly believe that the original requirement was more conducive to harmonious employment relations and efficient management. I urge the Minister to explain exactly why he believes it to be necessary to depart from the wording of the original statute. We tabled what we believe is a perfectly reasonable amendment. The learned Clerk, to whom I defer and whom I respect enormously, took the view that the amendment went to the core of the clause. Will the Minister enlighten the Committee as to his thinking?

Gerry Sutcliffe: I shall try to do what the hon. Gentleman asks, if that is possible. The essential features of the pre-1997 law on industrial action have been retained. The industrial relations scene has improved. Those aspects have become an accepted feature of our employment relations system and the Government have no plans to remove them. However, parts of the law have become too complex and act as a tripwire for unions. Even when unions meet the main requirements of the law, they can still make technical mistakes that leave their actions open to time-consuming and costly legal challenge. That cannot be right and it does not represent good regulation.
 We are therefore taking a limited number of steps in the Bill to deal with problem areas, where the law is particularly cumbersome and unnecessarily onerous. The clause deals with the law on notices that the unions must supply in advance of pre-strike ballots. The 1999 Act amended that law but, in reviewing that Act, we concluded that those changes were in fact counter-productive. Contrary to our intentions, we probably increased the burden on unions, in many cases requiring them to provide detailed matrices in notices. Moreover, the changes to the 1999 Act left unclear precisely what information should be disclosed. 
 In part, that conclusion flows from judgments in several high-profile legal cases, most notably London Underground Ltd. v. National Union of Rail, Maritime and Transport Workers. We have therefore acted quickly to ensure that the desired simplification is achieved. The clause aims to do that in several ways. First, it clearly defines the information that the union must provide in the notices. The requirement is to provide two lists that identify the categories of workers involved and the workplaces involved. In addition, the 
 notices must contain figures that identify the total number of workers involved, the number of workers in each occupational category and the number of workers at each workplace. Together, those requirements remove the need to provide matrices. The proposals are based on the information that a union can realistically be expected to provide an employer. The union's duty is clear and the essential needs of the employer are met. No longer should unions be required to provide data of questionable accuracy and usefulness to employers. 
 Secondly, the clause deletes the reference in the law requiring the union to supply such information as would enable the employer to make plans. The original formulation left it wide open for an employer to assert that extra information was needed and meant that the union never knew with certainty whether it had met the requirements of the law. Thirdly, we have made it clear that the union need only supply information that is in the possession of, or accessible to, union employees or union officers, such as general secretaries.

Jim Sheridan: I listened yesterday to the hon. Member for Huntingdon's speech on his ten-minute Bill on European deregulation. Not once was the question of employees mentioned, which gives an indication of exactly where his priorities lie. The clause will relieve trade unions of the current administrative burden, but can my hon. Friend the Minister clarify the meaning and likely application of the phrase ''categories of employee''?

Gerry Sutcliffe: I am grateful for my hon. Friend's intervention. I did not have the opportunity to hear the hon. Member for Huntingdon's speech on his ten-minute Bill yesterday, but I am sure that I shall read it with great delight in Hansard and see that he failed to make the references that my hon. Friend mentioned.

Jonathan Djanogly: The last time the hon. Member for West Renfrewshire (Jim Sheridan) made a personal remark, I ignored it, but this time I shall put him right. I specifically mentioned the impact of gold-plating European regulations on employees. He can look in today's Hansard to confirm that.

George Stevenson: Order. That is enough of yesterday's ten-minute Bill.

Gerry Sutcliffe: I am sorry for diverting us down a path along which none of wish to go.
 The category of worker is clear and refers to those who are involved in the industrial action. The union must provide that information to the employer, so that people are clear and so that no one can take advantage of it. The information that is necessary is clear. The clause gives that clarity and affords the opportunity to reduce the administrative burden. That was the original intention behind the 1999 Act, but the way we administered it meant that it did not work out. I see nothing underhand that the employer would take issue with. It is clear what information is expected. The fears expressed by Opposition Members are in line with their fears about the Bill, and I would not be able to convince them if we were to stay here until Christmas day.

Jonathan Djanogly: I will not dispute what the Minister has said. However, will he clarify whether he has received any representations from employers on the issue? He has not laid out whether he has, or what their position was. Can he also clarify the meaning of clause 17(4)(2E)(b)? It reads:
''where the employees concerned are not all to be sent the same form of voting paper, a sample of each form of voting paper which is to be sent to any of them.''
 Can he give an example of when that would be put into practice? Why is that provision needed?

Gerry Sutcliffe: I will have to write to the hon. Gentleman to explain the detail of that process. It is nothing underhand. It is to ensure that everyone involved has the opportunity to be involved.
 The hon. Gentleman asked about representations from employers. A number of employers submitted their views throughout the review of the 1999 Act, as I mentioned at the start of discussions on Tuesday morning. There were no specific concerns about that aspect of the Act. 
 Question put and agreed to. 
 Clause 17 ordered to stand part of the Bill.

Clause 18 - Entitlement to vote in ballot

Question proposed, That the clause stand part of the Bill.

Henry Bellingham: I have just a couple of points on clause 18. The Minister mentioned the Midland Mainline case. I understand that the raison d'être of clause 18 is to put it beyond doubt that the union does not have to give an entitlement to vote to members who might take part, even though they are not induced to do so by the union. I am not quite clear what happened in the Midland Mainline case. It involved the National Union of Rail, Maritime and Transport Workers, but I am not quite clear who the workers were who felt that they should have been entitled to vote even though they were not induced to do so by the union. Can the Minister clarify that? I can see the purpose of clauses 18 and 19, but if the Minister could shed some extra light on that I would be grateful.

Jonathan Djanogly: Existing legislation already provides that the ballot will stand even though the union committed minor errors in determining who was eligible to vote or failed to send ballot papers to all those required to be given entitlement to vote. I believe that the clause clarifies that the right extends to situations where a union accidentally fails to ballot an insignificant number of those who it intends to induce to take part in industrial action.
 I am not entirely sure what ''small accidental failures'' means. I appreciate that there has been a case, but one case does not immediately translate into statute. What does ''small accidental failures'' mean, and when does a small accidental failure become a large accidental failure? At what point does it cross the line?

Gerry Sutcliffe: There were in fact three cases: London Underground Ltd. v. RMT, Midland
 Mainline Ltd. v. RMT and Westminster city council v. Unison. Those cases raised issues that reflect why we are in this position. In the case of Midland Mainline v. RMT, the union sent out notices stating that all RMT members employed in the grades of operational train crews were involved, when in fact only some of the members in those grades were balloted. It was clearly about the reasonableness of the information provided.
 We are trying to clarify the meaning of section 227 of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 227 defines those individuals to whom the union must accord an entitlement to vote in an industrial action ballot. It requires the union to ballot those members 
''who it is reasonable at the time of the ballot for the union to believe will be induced to take part . . . in the industrial action in question.''
 The phrase ''will be induced'' is unclear. That was brought to light in the case of Midland Mainline v. RMT. In its judgment, the Court of Appeal stated that the phrase related to any union member who might take part in the action even though they had not been induced to do so by the union. In other words, the union had to predict how members whom it had no intention of inducing to take industrial action might act if there were a strike, and had to ballot them if it had reason to believe that calling the action could prompt them to take part. It is difficult, if not impossible, for unions accurately to forecast the reactions of the members whom it does not induce. 
 This clause makes it clear that the entitlement to vote applies to those who are likely to be induced ''by the union'', which was the accepted interpretation of section 227 before the judgment in Midland Mainline v. RMT. The clause removes ambiguity from section 227, and improves the way that the law reads. It does that by ensuring that the requirement placed on the union is reasonable. 
 I move now to the point made by the hon. Member for Huntingdon about the definitions of small and major lapses. If there were an issue outside the clearly defined rules that the clause introduces, it would be up to the courts to decide the gravity of the position. In light of the three relevant cases, we think that minor infringements need to be considered. That is the basis of the reasonableness of the clause. If there were an extensive breach, the employer would have the right to appeal to the courts.

Jonathan Djanogly: I understand what the Minister says, but I want to come at this from a slightly different angle. The clause also deals with the union inducing non-balloted people to strike. Should not the legislation provide for the number of people who have not been balloted but who could then be induced? It all seems pretty woolly.

Gerry Sutcliffe: It is not intended to be woolly. It should be taken in context with the pattern of the Bill and the relations that exist. We are clearly defining what information the union must give to the employer about categories of workers, but we do not want the union to get into a situation in which it must predict what might happen.

Jon Cruddas: Is not it quite simple? The union should ballot those whom it seeks
 to induce to breach their contracts of employment. It should not ballot those whom it does not seek to induce, or those whom, by consequence, are not induced by the union, which has tortious liability in law for inducing breach of a contract of employment. Is not it as simple as that? This is an exercise to ensure that certain ambiguities are clarified.

Gerry Sutcliffe: I am grateful to my hon. Friend. He has explained the situation clearly and more eloquently than I seem able to explain it this morning. He has outlined the reason why the clause should stand part of the Bill.
 Question put and agreed to. 
 Clause 18 ordered to stand part of the Bill. 
 Clause 19 ordered to stand part of the Bill.

Clause 20 - Information about employees to be contained

Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: I seek clarification on this clause. The amendments proposed by the Opposition have not been selected for debate. That is probably because their content has been covered previously. I accept that, but I want to know whether the issues that we debated when we discussed the ballot notice in clause 17(3) are the same as those which apply to the industrial action notice, namely, in relation to the points made by my hon. Friend the Member for North-West Norfolk about the branch employee and about inducement. I hope that I have made myself clear.

Gerry Sutcliffe: I do not need to respond in great detail. We have set out clearly the reasoning behind the clause, and how it relates to earlier clauses. We aim to simplify the procedure for establishing which information is required and to ensure that it is reasonable, while not putting an undue administrative burden on the unions or inciting anyone to worsen the relationship between the union and the employer in a situation that is already difficult because it involves industrial dispute. The clause is entirely sensible and is in line with the sentiments of the Bill.
 Question put and agreed to. 
 Clause 20 ordered to stand part of the Bill.

Clause 21 - Dismissal where employees taking protected industrial action locked out

Question proposed, That the clause stand part of the Bill.

Henry Bellingham: The essence of the clause is the case of Davis v Friction Dynamics. The clause introduces an additional element to the protections for striking employees that appear in section 238A of the 1992 Act by changing the scope of the eight-week period currently specified by providing for locked-out days
 to be disregarded when determining the length of the period. We have looked at the clause in detail, and the Minister's Department has had to respond to the Friction Dynamics case. It has given a watertight response—a lot of work obviously went into it—and I congratulate the Department on drafting a form of words that meets the need. I hope that it will stand the test of time if it is again used in court.

Albert Owen: I, too, want to concentrate on the Friction Dynamics case, which involved the locking-out of employees taking protected industrial action. I welcome the clause as a positive step towards the prevention of a repeat of such injustice. The incident occurred in the constituency of the hon. Member for Caernarfon (Hywel Williams), but it affected my constituents, many of whom still work at Dynamex Friction, which now operates in that location. I pay tribute to the strikers and the union for taking the case the whole way, and I applaud the Government for listening to the arguments that were made by many Members of this House and by the TGWU.
 I have concerns about the eight-week rule because anomalies in the 1992 Act were carried through into section 238 of the Employment Relations Act 1999. The eight-week rule is embedded in the provisions, but the protection falls subject to the employer who fails to take the procedural steps to solve the dispute. Friction Dynamics is cited as one case in which the eight-week rule failed. However, it is one case too many, and it has profound implications for industrial and trade union law. 
 The clause will give protection in future action because it addresses the issue of the lock-out period. I remind the Committee that, in April 2001, Dynamex Friction—the same company in all but name—sacked 86 official strikers who had returned to work after one week and found themselves locked out. They were given an ultimatum. The tribunal in October 2002 found that the company had no desire to settle the dispute within the procedures of the Act; it made no attempt to resolve the dispute by following the eight-week rule. The workers were unfairly dismissed and temporary labour was used in their place. The company appealed, purely to extend the period of the strike. It went to the eleventh hour and then pulled the appeal, knowing that it was falling foul of the law and owing £1.3 million in compensation to those workers in redundancy, holidays and arrears of pay. That company had received grants from the Welsh Development Agency. I know that that is not the issue with regard to the Bill, but it is important to put it on the record. 
 The clause extends beyond the basic 56 days the protected period during which official strikers are locked out. In theory, the new extended protected period—including the initial period of eight weeks, plus the period where they are locked out—relates to an indefinite strike period, such as in the case of Friction Dynamics. Good, genuine employers are not worried about eight weeks; if they really want to settle a dispute, they can settle a dispute. Only rogue employers such as Friction Dynamics have to worry 
 about time factors, and the company pushed it to the limit. 
 This measure will help and is a positive step. However, what direct action would be taken against an employer if it were to employ temporary labour during the lockout period? I understand the theory and provision of the Bill, but I believe, in the light of the Friction Dynamics dispute, that this hurdle may be a little too low. I ask my hon. Friend the Minister to respond by saying not only what action would be taken against the temporary labourers, but what action would be taken to prevent a company from doing exactly what Friction Dynamics did; that is, go through the motions of a tribunal and appeal and then go into liquidation? Also, will the clause be monitored over the period to prevent a similar injustice to that of Friction Dynamics' workers, which, in the 21st century, is an absolute disgrace?

Hywel Williams: As has already been said, this clause arises in part from the short strike and very long lock-out in my constituency at Friction Dynamics. The clause is a tribute to the way the union and the workers conducted themselves, and to the courage and the persistence that they have shown over this lock-out.
 The circumstances of the strike will be known to many hon. Members, and I do not wish to rehearse them here, except to say that the TGWU engaged in a long period of negotiation with the American employer who took over four or five years ago. These negotiations, about worker conditions and pay, were deadlocked. The workers went on strike for one week only and then were locked out. After eight weeks, under the law as it is, they were sacked. They continued to picket for two years and nine months until just before Christmas, one of the longest disputes in British industrial history. As the hon. Member for Ynys Môn (Albert Owen) said, they won their industrial tribunal but they are still awaiting compensation. 
 The law allowed the employer to lock the workers out and then sack them. Clause 21 is a welcome partial remedy to the situation of lock-outs, but as and when procedures allow we will be able to return to what is, for me, the fundamental issue; the eight-week rule itself. Under clause 21, in a case such as Friction Dynamics where workers are locked out in week one, the protection would be extended to 15 weeks, and I thank the Minister for his letter to me confirming that after Second Reading. However, one of the weaknesses of this provision is that it will still be possible for the employer in such a case to sack the workers after the end of the 15-week extension period. 
 The vast majority of employers and unions will be very keen to settle industrial disputes well within the eight-week period without resorting to sackings, lock-outs and the unfortunate circumstances in Caernarfon, and I would want that to be normal in industrial relations. Those of us who sat through many weeks discussing the Employment Act 2002 will remember its intention. I welcome clause 21, but my reservation is that it does not address the eight-week rule in itself. I 
 welcome the clause, but I cannot accept that a legal strike can be protected for 56 days, but that everything changes on the 57th day. I hope that the Government will reconsider in due course and look at the eight-week rule again.

John Lyons: We have spent considerable time this morning discussing the preparation and avoidance of industrial disputes, the supply of figures and names and the ballot process. I support the clause because it is a great improvement. We are starting to learn some of the lessons from Friction Dynamics and elsewhere.
 When a person takes part in a ballot, they are asked to participate in and accept the law of the land. People must be balloted and make their decision for strike action, or, more probably, against it. People who take a positive decision to strike against their employer should be fully protected in that period. No one should be dismissed because they are on strike or in a dispute. There should be full legal protection during that period. What is the point of asking people to participate in a ballot, follow the law of the land and take a positive decision, but then to say that it is okay for the employer to dismiss them? The TUC is absolutely right. There should be protection from day one until the end of the dispute. 
 I hope that my hon. Friend the Minister will think about that. Equally, I welcome the clause, because it is major progress. We should continue in that direction, but we should bear in mind that rogue employers will still take action against people outwith the provisions in the clause. That is to be regretted and we should condemn it every time it happens.

Jonathan Djanogly: At the risk of sounding like a voice in the wilderness, I shall set out an alternative position. Essentially, there is no moral difference between a lock-out and a strike. There might be strikes for good reasons or for bad reasons and there might lock-outs for good reasons or for bad reasons.

Gerry Sutcliffe: Will the hon. Gentleman give an example of what he would regard as a reasonable lock-out?

Jonathan Djanogly: When is it reasonable for workers to kill a company by walking out?

George Stevenson: Order. I am a little worried that we are getting into legal questions as to what is reasonable and what is not. It is perfectly understandable that we should discuss that in the context of the clause, but let us keep the conversation at the level at which it has been so far.

Jonathan Djanogly: I fully agree. I simply make the point that there will be good and bad situations, as and when. I fully accept the points that hon. Members have made about Friction Dynamics, where the workers had a strong case. I do not have any special knowledge of the case, although I have read the notes and I accept what hon. Members have said.
 I agree with the hon. Member for Ynys Môn that the clause will have to monitored, although not for quite the same reasons. There will have to be monitoring because the clause in some ways assumes that lock-outs will be for the wrong reasons. In other words, the eight-week period would be extended 
 automatically even if a lock-out were due to the union's intransigence or the fact that workers had destroyed company property during the strike. If workers were locked out for that reason, the eight-week period would continue to run.

Albert Owen: The hon. Gentleman's example of damage to property is covered in the 1992 and the 1999 Acts. Will he give an example of a legal dispute in which the employees wished to return to negotiate but were locked out by the employer? Would he consider that reasonable?

Jonathan Djanogly: It would depend entirely on the circumstances. If, during the strike, there were violence and destruction of company property to which the company reacted by locking out employees, such action would be quite justified. More to the point, it is quite wrong that those lock-out days should mean a continuation of the eight-week period. The clause does not provide for the relevant circumstances; rather, it automatically extends the eight-week period, which is intrinsically wrong. For that reason, it must be monitored.
 At this time of increased militancy—there is a rise in both official and unofficial strikes—strikers might be tempted to think that they can get away with anything during a strike because it will not impact on the eight-week period. I do not refer to all strikers or to all circumstances, but it is a matter of concern.

Bill Tynan: I welcome the changes to the eight-week rule. I understand that Friction Dynamics was able to mount a challenge at a tribunal only because of a technicality. In a previous life, I had experience of a company that had to go through the process of an industrial ballot. Anybody who has been involved in one and who has had to give information under the 1992 Act will know how difficult it is to ensure that the information is correct. In that case, a bad manager had been put in charge of the work force. The workers were forced to take industrial action, not because they wanted to—many of the workers had given 35 years of their lives to the plant—but because of a decline in conditions and a reduction in wages. In those circumstances they took the ultimate decision to go on strike. No group of workers takes that decision lightly.
 It is unfortunate to hear Opposition Members speaking about killing a company. What is a company? It is made up of the people who work in it. They create a relationship that means profitable opportunities for the employer and better wages and conditions for the employee. It is essential to remember that in this type of debate, in order to nail the lie that workers are simply out to destroy companies. Legislation such as this is needed only because there can be bad employers. No right-minded person would condone the destruction of company property. In fact, there are laws to deal with it. Violence should be viewed in the same way.

Brian Cotter: The Bill's objective is to create an atmosphere within companies that does not foster the ''killing off'' attitude. I speak as one who took over as managing director of a
 company that had a ''them and us'' attitude before I arrived. That sort of thing is to be deplored, and we are trying to set standards that will prevent it from persisting.

George Stevenson: Order. If the hon. Gentleman wishes to make a speech, he should catch my eye. Interventions should be short and to the point.

Bill Tynan: I thank the hon. Gentleman for his intervention and I wish him well in developing the sort of relationship that is required to make a success of a company. I endorse what he says.
 My point was about the eight-week rule. I spoke of the tortuous route that unions have to go down in order to deliver a strike ballot. They do not like and do not want strike action. Given that they are legally obliged to follow that kind of procedure in order to arrive at a strike ballot, I ask the Government to look seriously at the eight-week rule. If there is a strike, dismissal should not be an option for an employer at any time.

Jon Cruddas: Briefly, I welcome the way in which the clause deals with lock-outs. However, like some of my colleagues, I urge the Minister to remain vigilant and not to close the door on the issue. Another Friction Dynamics could occur, and we could end up in an invidious position. Whatever the figure—be it eight, 10 or 12 weeks—an employer might swerve around the protections and people in legitimate, bona fide industrial disputes might then not have protection against unfair dismissal, even though the dispute met all the legal criteria needed for it to be considered legitimate.
 This may be a bit off the Government's radar at the moment, but they should not close the door on the issue and should actively consider the possibility of a positive right to strike, rather than negative protections, in the form of tortious liability, for unions and individuals who are on strike for eight, 10, 11 or 12 weeks. Whatever the limit, those involved in legitimate trade disputes could be legitimately dismissed, despite the fact that every protection applied and every duty had been followed according to the precise legal framework. At some stage, the Government should reconsider the unique nature of British labour law, which is partly the product of the timing and sequence of Britain's industrialisation. They should not discount the possibility of having positive rights rather than negative immunities.

Gerry Sutcliffe: This has been a useful and helpful debate. It has also been quite poignant given the references to Friction Dynamics, and I shall return to that issue in a moment.
 Having been on strike myself, I agree with my hon. Friend the Member for Hamilton, South (Mr. Tynan) that no one willingly goes on strike. It is the last resort and it constitutes a failure; the failure to resolve issues through negotiation. No one goes on strike lightly and standing on a picket line outside a company in which one has spent most of one's working life is a cold, lonely experience. One has to deal with difficult relationships when one goes back after the strike has ended. In that sense, a strike is a failure. 
 It might be useful to explain why we are where we are with the clause. I shall deal in detail with Friction Dynamics and the contributions by my hon. Friend the Member for Ynys Môn and the hon. Member for Caernarfon later. 
 Before the 1999 Act, there was limited protection against dismissal for employees taking industrial action. Sacked employees could claim unfair dismissal only where they had been selectively dismissed, or where the employer had offered to re-engage only some of them within three months after dismissing them all. 
 The Act extended that protection in two major ways to those taking official, lawfully organised action. First, dismissal for taking part in the first eight weeks of such action, or at any time if the action lasted less than eight weeks, became automatically unfair. Virtually all industrial action—93 per cent., in fact—is shorter than eight weeks. Secondly, the Act made it unfair to dismiss people for taking part in the industrial action after the eight-week period if the employer had not taken all reasonable procedural steps to resolve the dispute. It is a pity that that aspect of the protections receives less attention than the eight-week period, because the second leg of the protections are important and were intended to stimulate the resolution of disputes. 
 As is well known, and as hon. Members have mentioned, an employment tribunal has decided only one case so far under the present jurisdiction; Davies v. Friction Dynamics. It found that the employer had acted unlawfully, whichever count applied. The case highlighted a range of potential behaviours to which bad employers might resort to avoid the statutory protections. We have studied the tribunal's decision closely, and the clause is partly based on our assessment of the employer's actions. However, it is not based only on them, and I shall return to that later. 
 The clause deals with the treatment of lock-outs when calculating the eight-week period. It will ensure that lock-out days do not count towards the eight-week period. That means that there must be at least 56 days on which no lock-out took place before the period of automatic protection ends. Therefore, if the employer locks out the work force for 10 days immediately after the start of the industrial action, the period of automatic protection will last 66 days. 
 That arrangement ensures that employers cannot try to sit out the eight-week period by locking out their employees for most or all of the period. Lock-outs usually ratchet up the tension in disputes and may make it more difficult to resolve the underlying issues. One effect of our proposal is that the period of protection cannot end as long as a lock-out continues, so employees will be protected as long as they remain locked out. This makes it less likely that the settlement process will be complicated by the existence of a lock-out. That should greatly help to resolve difficult disputes and, in most cases, will avoid dismissals altogether. Let me emphasise that the proposals are designed to minimise the risk that parties will simply 
 go through the motions instead of trying to resolve a dispute. 
 I feel for the workers of Friction Dynamics and the people of Caernarfon, and I pay tribute to the work that hon. Members on both sides of the House have done to support the TGWU, which has acted reasonably and rightly. The situation is a disgrace. My right hon. Friend the Secretary of State for Trade and Industry met the workers of Friction Dynamics, who expressed their opinions about all the issues that led to the dismissals. Those workers have still not had the compensation to which they are entitled. I hope that they will receive it when the award hearing delivers the appropriate judgment. The administrators still have to report on Friction Dynamics, which does not allow me to go into detail about the conduct of the directors. Rest assured, however, that we await the report and will see what happens. 
 The TUC line is that people should have day one rights so that they can go through the admittedly tortuous process of ballots and ensuring that the legal steps have been taken. The eight-week period came about through negotiations under the Employment Relations Act 1999, which I will not discuss as I risk embarrassing certain members of the Committee. I am keen on the reasonable steps to resolve the dispute so that we can get away from the ''us and them'' culture described by the hon. Member for Weston-super-Mare (Brian Cotter) and have positive and dynamic industrial relations to meet future challenges. That is where we should be heading, and where we are heading. 
 There is no return to militancy. Throughout our deliberations, the hon. Member for Huntingdon has had a consistent attitude to trade unions and the relationship between employers and employees. He is wrong, however, and the figures show that he is wrong. He only has to consider the number of disputes and—

Henry Bellingham: Working days lost.

Gerry Sutcliffe: I thank the hon. Gentleman for reminding me where I was. The culture has changed tremendously.
 My hon. Friend the Member for Ynys Môn asked me about temporary workers, and employers' ability to use them. That would not be unacceptable. The code of practice relating to employment agencies means that people could not be supplied to take the place of workers in that situation. I accept what he says about needing to monitor the clause in light of the experience of one case so far, Friction Dynamics. There are, however, issues of principle. I give the undertaking that we will monitor and review the situation as it progresses, and the Bill is the result of that commitment. The workers at Friction Dynamics were unfairly treated. The way in which the company acted was a disgrace. My right hon. Friend the Secretary of State's remarks about Friction Dynamics are on the record. 
 The clause moves us in the right direction. It creates the opportunity to ensure that employers and employees have to try to resolve the dispute. I hope that members of the Committee, albeit with reservations, will support the clause. 
 Question put and agreed to. 
 Clause 21 ordered to stand part of the Bill. 
 Clause 22 ordered to stand part of the Bill.

Clause 23 - Inducements relating to union membership

Henry Bellingham: I beg to move amendment No. 39, in
clause 23, page 19, line 30, leave out 'or main'.

George Stevenson: With this it will be convenient to discuss the following amendments:
 No. 40, in 
clause 23, page 20, line 28, leave out 'or main'.
 No. 41, in 
clause 23, page 20, line 40, at end insert— 
 '(6) It shall be a defence for the employer if the worker has asked for an inducement not to be a member of a trade union or to take part in its activities.'.
 No. 43, in 
clause 23, page 21, leave out lines 6 to 9.
 No. 44, in 
clause 23, page 21, line 17, leave out 'or main'.

Henry Bellingham: The clause concerns inducements and detriments in respect of membership of independent trade unions. Proposed new section 145A replaces section 145 of the 1992 Act. It states:
''A worker has the right not to have an offer made to him by his employer for the sole or main purpose of inducing the worker''.
 I ask the Committee to focus on amendments Nos. 39, 40 and 44. They would leave out ''or main''. The reason for the amendments is that the phrase ''sole or main purpose'' could be ambiguous. It does not distinguish effect from purpose, and its consequences go significantly further than the Government's stated intention, published in the DTI's consultation document on the 1999 Act, of prohibiting inducements or bribes being made of trade union members. The consultation document noted that employers often enter contractual arrangements with individual employees that contain different terms from the provisions of a collective agreement. 
 Will the Minister say how the clause will enable an employment tribunal to decide whether an employer's offer of arrangement—an offer that contains different terms from the provisions of a collective agreement—could be considered to have as its main intended purpose an inducement for the employee to give up certain statutory rights? Is it not entirely a subjective decision? I point out that there has been much debate and discussion on how judgments of the European Court of Human Rights should be incorporated into United Kingdom law. The ambiguous wording does not offer clarity or reduce uncertainty. 
 Amendment No. 41 would insert a new subsection in proposed new section 145A. It states: 
''It shall be a defence for the employer if the worker has asked for an inducement not to be a member of a trade union or to take part in its activities.''
 That would give the employee the right to request arrangements that contain different terms from the provisions of a collective agreement. I do not see how anyone could disagree with such a provision. 
 It is easy to forget that flexibility in the labour force is good not only for employers; it is often sought by employees who need a more flexible way to work. Above all, often, employees want the freedom to decide their own working times and conditions. That is in line with what the Government are trying to achieve with the right to flexible contracts. We have heard much talk over the past few months about the work-life balance, with an emphasis on flexibility and on employees having more choice. I know that hon. Members on both sides of the House have been following that debate carefully. Indeed, there is general consensus on the subject. 
 Amendment No. 43 would leave out subsections (1) and (2) of proposed new section 145D, on consideration of complaints. Subsection (1) states: 
''On a complaint under section 145A it shall be for the employer to show what was his sole or main purpose in making the offer.''
 Subsection (2) states: 
''On a complaint under section 145B it shall be for the employer to show what was his sole or main purpose in making the offers.''
 Given the disagreement over the best way to incorporate the Wilson and Palmer judgment into UK law, the Opposition feel that making employers responsible for showing their sole or main purpose goes a long way beyond the ruling of the European Court of Human Rights. Making employers responsible for proving their innocence could be burdensome, particularly to smaller companies. As we saw from statistics given by officials on Tuesday, many companies with between 21 and 50, 75, 100 or 150 employees will find the extra demand somewhat burdensome. 
 It is a slightly complex grouping of amendments but, in a nutshell, amendments Nos. 39, 40 and 44 would remove ''or main''. I have also explained amendments Nos. 41 and 43.

Jim Sheridan: I recognise that the Bill goes a long way towards preventing employers from bribing staff out of union representation. I have plenty of anecdotal evidence in my constituency of employers who carry out such practices and offer different employees bonuses, dependent on their status in the company and whether they wish to join the trade union. The Bill goes a long way towards changing the law and reflects the judgment in the European Court of Human Rights. It offers union members a positive right to access the services offered by their union, but makes it clear that employers can still offer individualised contracts if they so wish as long as they do not require as a pre-condition the giving up of union representation.
 The only area that gives me some cause for concern is the phrase ''sole or main purpose''. I suggest that that is somewhat too strict a test to give workers the proper recognition and protection that they need. I urge the Minister to consider seriously taking out the words ''sole or main''.

Jonathan Djanogly: This is a new provision, unlike most of the provisions in the Bill. Therefore, it deserves to have a certain amount of time spent on it. Clause 23 would introduce new provisions to give workers the right not to have offers made to them where the employer's ''sole or main purpose'' is to induce the worker to do or not do certain things, such as become a member of a union or take part in its activities. If a worker feels that his rights under the clause have been breached, he can apply to an employment tribunal within three months of the alleged inducement. Fines for the company are involved.
 The Bill is strictly drafted. In essence, the employer may have another legitimate reason for offering an inducement to the workers, such as to reward high performance or offer bonuses. Workers may deserve to be given bonuses for their hard efforts. The drafting could be interpreted in such a way that it, in effect, stopped a company from managing effectively and offering incentives to individuals, so that they do their best for themselves and for the company. 
 We suggest that the employer should be criticised only if their sole purpose is to induce the worker out of union membership or involvement and that the clause should not include the ''main purpose'' test. The clause could lead to hard-working, successful, innovative employees not having their contributions recognised. 
 In certain circumstances, companies would have to weigh up the extent to which they were inducing legally or illegally. The impact would be that companies said that they would not go down the route of offering incentives but deal only with the union. That may be the object as far as certain hon. Members are concerned—I do not know. However, it would be a negative move and a throwback to the way in which things were done years ago. It is not the modern way to do things and it would cut the ability to incentivise. It would also go directly against this Government's claim to be looking to increase productivity and enterprise in the economy. 
 Unless it is applied more directly, this measure will go against what it is intended to do. There are wider issues, to which my hon. Friend the Member for North-West Norfolk and I shall refer in the stand part debate. 
 I have just been speaking to amendments 39, 40 and 44. Amendment No. 41 inserts a defence for the employer if a worker has asked for an inducement not to be a member of a trade union, or to take part in its activities. If the Government are going to be insistent and to ignore what I have been saying in relation to the other three amendments, which I feel may be the case but we live in hope and wonder, amendment No. 41 becomes even more important. As things stand, the company and the worker could do a deal relating to the worker's pay and conditions. People are entitled to do such deals with their bosses.

Bill Tynan: I wonder whether the hon. Gentleman can explain why a worker who is a member of a union would go to an employer and ask for an inducement not to participate in union activities or to be a union member. Would it not be much simpler for that individual simply to withdraw from the union? We do
 not have recognised closed shops any more. It is the right of someone to belong to a trade union or not to belong. Can the hon. Gentleman explain why that amendment is necessary?

Jonathan Djanogly: It is necessary because the issue is not just straightforward membership or non-membership of a union but the services that a union provides. There is a series of issues concerning whether what the employee is doing with the company has a negative impact. It is not straightforward. My concern is that those complications will make a company less willing to deal directly with the worker and put in place, for example, a bonus package for workers who do a certain amount—
Mr. Tynan rose—

Jonathan Djanogly: The hon. Gentleman is going to help me out, I see.

Bill Tynan: I hope that I can help the hon. Gentleman. Obviously, if a member of a union were acting in a detrimental fashion to the employer's business, I would expect the union to ensure that that ceased. Therefore, I cannot understand the hon. Gentleman's explanation. Can he try again to indicate why a trade union member would not simply resign from a union and the services it provides, and just act as an employee with the employer?

Jonathan Djanogly: Yes, I think I have found the relevant provision. Proposed new section 145A states that the worker has the right not to have an offer made to him by his employer inducing him
''(a) not to be or seek to become a member of an independent trade union,
''(b) not to take part, at an appropriate time, in the activities of a independent trade union''—
 so it could be a one-off— 
''(c) not to make use, at an appropriate time, of trade union services''—
 I am not entirely sure what that means, and I am sure the Minister is going to advise us when we come to stand part—and 
''(d) to be or become a member of any trade union or a particular trade union'',
 so there is a range of things. Frankly, I do not know what half of them mean. 
 The point is that the company will be dissuaded from incentivisation. That may play very nicely into the hon. Gentleman's agenda—[Interruption.] It may or may not, I do not know, but it is negative, and contrary to what the Government have said their policy is meant to be. However, I want to move on. 
 As things stand, although the company and the worker could do a deal, the company could then be taken to court and fined, even where it is the worker who does the inducing. I know the hon. Member for Hamilton, South wants a reason why the worker would want to do the inducing, but that is not for me to say—that is for the worker to decide at the appropriate time. If the worker did do that, the company would be liable. 
 Suppose that the union does a deal with the company, which involves recognition of several people getting bonuses as part of a wider pay settlement, and that deal falls away within the three-month claim period due to a fault of the union. Will the Minister clarify whether the clause would apply in that situation? Could the company be fined £2,500?

Henry Bellingham: A key issue in this matter is the European Court of Human Rights judgment on the grounds of freedom of association. It said that the law does not prevent the employer from offering inducements to employees in the group to persuade them to surrender their collective representations and instead have their terms settled by negotiations. Does my hon. Friend agree that there is a conflict between freedom of association and freedom of the individual? He has spoken a lot about the freedom of the individual to be incentivised to look at a bonus package. Under the European convention on human rights, there is an inherent conflict between that and the freedom of the individual to make whatever arrangements he or she sees fit.

Jonathan Djanogly: My hon. Friend makes a good point, which I was going to touch on in the stand part debate. I want to be sure that if the union does a deal with the company, part of which is the recognition of certain bonus arrangements, and in the following three-month period the worker decides that that was an inducement, that cannot be used against the company.
 I move on to amendment No. 43, which would remove subsections 145D(1) and (2). They reverse the burden of proof, as the employer will now have to show that its sole or main purpose in making the offer was not to make an inducement. That is the reverse of what is normally the case. In such a situation, it would be the worker taking the employer to a tribunal. Should it not be for the worker to prove that he was induced to leave the union rather than for the company to show that it did not make an inducement? This measure turns the normal legal process on its head by reversing the burden of proof. I am interested to know why the Government took that point of view. 
 The measure again shows how the Government use the law to make employers out to be the bad guys. They must prove their innocence, although that is not normally the case. That principle is important because, regrettably, the measure sets the tone for the legislation.

Gerry Sutcliffe: I thank hon. Members for their contributions to this complex debate. I will do my best to explain the Government thinking in relation to the amendments proposed by the hon. Member for North-West Norfolk.
 I will start by looking at amendments Nos. 39, 40 and 44, which seek to amend the key rights provided by clause 23. The clause stems from the 2002 judgment of the European Court of Human Rights in the Wilson and Palmer case, which held that aspects of our trade union law breached article 11 of the European convention on human rights on freedom of association. Among other things, clause 23 makes it 
 unlawful to offer union members a bribe to forego key union rights. It was precisely such behaviour that gave rise to the Wilson and Palmer case, in which workers were offered cash inducements to have their contractual terms determined outside the scope of a collective agreement. 
 In drafting the clause, we have sought to create a clear entitlement for union members to use the services of their union. No longer will it be possible for individuals to be punished by their employers for asking their union to make representations on their behalf. That is a major advance. 
 The clause is long and complicated. It inserts six new sections into the 1992 Act, which is the main Act concerning the rights to trade union membership. The amendments in the group directly affect three of those new sections, namely new sections 145A, 145B and 145D. I hope that it will be helpful if I explain what each of those new sections does. 
 Proposed new section 145A deals with bribes to workers to relinquish their individual rights to union membership and to take part in union activities. It creates a new right for workers not to be offered bribes by their employer for the sole or main purpose of inducing them either to leave or not to join a union. I shall return to the points that my hon. Friend the Member for West Renfrewshire raised earlier.

Jonathan Djanogly: I have noticed the Minister's repeated use of the word ''bribe'', which is not mentioned in the legislation at all.

George Stevenson: Order. It is interesting that great minds think alike. I have just asked the Clerk the same question. I do not see the word ''bribe'' in the provisions. I am not qualified to say whether a bribe is an inducement, but can we please stick to the wording of the clause?

Gerry Sutcliffe: Thank you, Mr. Stevenson.
Mr. Djanogly rose—

Gerry Sutcliffe: Let me respond, Mr. Stevenson. I agree and I shall try to stick to the word ''inducement'', although ''bribe'' was not a Freudian slip.

Jonathan Djanogly: I think that that sets out where the Government and Labour Members are coming from. The cat is out of the bag.

George Stevenson: Order. The point has been rightly made: the word ''bribe'' does not occur either in the amendment or in the clause. Can we stick to the words in the clause please?

Gerry Sutcliffe: I shall do my best. I do not think that I need to respond to the hon. Member for Huntingdon.
 We are dealing with inducements to workers to relinquish their individual rights to union membership and to take part in union activities. Proposed new section 145A creates a new right for workers not to be offered bribes by their employer for the sole or main purpose of inducing them either to leave or not to join a union. It also creates similar rights not to be induced to forgo participation in union activities or the use of union services at an appropriate time. Proposed new 
 section 145A(2) provides a definition of ''an appropriate time'' that is already used by the 1992 Act in a similar context. In view of the existing law relating to rights not to belong to a union, the new section also contains similar provisions on inducements to be or become a union member. 
 Proposed new section 145B deals with inducements to forgo collective union entitlements. It creates a right for members of recognised unions not to be offered inducements by their employers with the sole or main purpose of ensuring that any or all their terms of employment will no longer be determined by collective agreement. The new section deals with the circumstances that gave rise to the Wilson and Palmer cases, in which Mr. Wilson and others employed by Associated Newspapers were offered £1,000 to enter individualised contracts that could not be negotiated by their union. 
 Proposed new section 145D deals with how the employment tribunal should consider evidence about the employer's sole or main purpose if a complaint arises. New section 145D(4) sets out two factors that the tribunal must take into account when determining the employer's purpose. The first factor concerns whether there is any evidence that the employer has recently taken steps to marginalise the union by downgrading the status of collective bargaining. Plenty of such evidence was available in the cases of Wilson and Palmer in the 1980s to suggest what their employers were really trying to achieve. The second factor relates to evidence that offers have been made to particular workers only to retain or reward their services. The provisions therefore cover evidence that the employer's actions concern key workers, who by definition are likely to be a minority of those covered by collective agreements. The employment tribunal must take such evidence into account. 
 Each of the proposed new sections that the group of amendments deals with refers to the sole or main purpose of the employer in making such offers. Each of the amendments removes the words ''or main''. The effect of that would be to ensure that inducements would be unlawful only where the employer had one purpose in offering them and where that purpose was prohibited. That would be a major weakening of the new rights.

Bill Tynan: I know that the issue has already been raised, but can the Minister explain the purpose of including ''sole or main'' in the definition? If the clause referred simply to the employer's purpose in making the offer, it would clarify the situation beyond reasonable doubt, without restricting what the tribunal could consider.

Gerry Sutcliffe: Again, I hear what my hon. Friend says, but I hope that he will bear with me while I try to explain the issues.
 The amendments would weaken the new rights that we are giving.

Michael Jabez Foster: Would they not do more than that? Would they not negate the reference to the employer's
 purpose entirely, because it would be almost impossible to prove a sole purpose? There will usually be another explanation for an offer or inducement, so anything absolute would negate the entire clause.

Gerry Sutcliffe: Again, I have some sympathy with what my hon. Friend says. I am sure that further discussions can take place if he remains unconvinced by what I say.
 Employers are likely to be motivated by several purposes when they offer inducements, and business decisions in the complex world of employment relations rarely boil down to one issue alone. It will therefore be simple for employers to show that at least one other factor was at work. Even if that factor was of minor significance and the employer's decision was basically driven by the desire to oust the union, the employer's actions would still be lawful under the amendments, and that cannot be right. 
 The amendments would drive the proverbial coach and horses through the new rights that we are creating, because bad employers would be able easily to breach those rights. In effect, in the light of the European Court judgment, we would be creating rights that were not compatible with the European convention. 
 The amendments would make it far too simple for the employer to interfere in the all-important relationship between a union member and his union. Our approach is to be preferred, because it makes it unlawful to offer inducements where the sole or main purpose is a prohibited one. That means that where the employer had only one, lawful purpose, the inducement would be lawful. Equally, where two or more purposes lay behind the employer's action, the employer would be acting lawfully where none of them was prohibited, or where the main purpose—say, to reward and retain key staff—was not prohibited. That approach provides the protections that we need. It also gives employers some necessary flexibility, which was a concern of the hon. Member for North-West Norfolk. 
 When the hon. Gentleman explained amendment No. 41, I had some difficulty understanding its purpose. It refers to matters dealt with in new section 145A, but it actually applies to new section 145B, which relates to matters not mentioned in the amendment. Regardless of whether the amendment is intended to relate to new sections 145A or 145B, my answer, in principle, will be the same. 
 It might help the Committee, however, if I briefly explain the different matters with which the two new sections deal.

Jonathan Djanogly: The Minister essentially asked for clarification of what the amendment relates to, and it relates to new section 145B(5).

Gerry Sutcliffe: I am grateful for that clarification.
 As has been mentioned, new section 145A deals with inducements to forgo certain individual rights to union membership. Those rights fall into four categories, which are listed in new section 145A(1). They include rights to use union services, and rights not to belong to a trade union. 
 As I said, I am not sure that the hon. Member for North-West Norfolk was right about the amendment, but if it does apply to new section 145A, it is partial in its effect, so I suspect that it is defective. There is also an issue about the complex drafting. 
 New section 145B relates to the different matter of giving inducements for the purpose of inducing workers to give up collective bargaining, but it does not deal with behaviour in the real world. I know of no cases in which workers have approached employers asking for money to leave a union or not to engage in trade union activities, such as attending union meetings in their own time.

Jon Cruddas: If the amendment were passed, we would see an awful lot of people doing precisely that, which is why it is a recipe for carnage in industry and why it goes against the principles of partnership that the Bill establishes.

Gerry Sutcliffe: My hon. Friend makes the point well. I do not think that Opposition Members have thought this through. If people want to leave a union, they will simply do so. They are free to do that under the law and they need not involve the employer. In the unlikely event of a request, the employer will just say no. It is odd to include a provision in legislation suggesting that union members are likely to ask their employers for money in return for giving up their union membership. I am unconvinced that that extra defence is needed.
 The amendment would make it easier for bad employers who initiated a campaign to ask the union to forego its rights. It is poorly worded and unnecessary, and will create scope for bad employers to abuse and undermine the entitlements that we seek to create in line with the spirit of the Bill. 
 Amendment No. 43 deals with how, should a complaint arise, the employer's sole or main purpose is to be ascertained by the employment tribunal—the point made by the hon. Member for North-West Norfolk. The section places on the employer the burden of demonstrating to the tribunal what its purpose was. That makes sense; nobody else can explain the employer's motivation.

Jonathan Djanogly: The Minister brushes aside the well-established principle of British law that if one takes somebody to court, one has to prove one's case, as though it is an irrelevance.

Gerry Sutcliffe: I do not see that it is relevant in the context of the spirit of the clause. Subsection (4) of new section 145D sets out two of the factors that a tribunal must take into account when determining an employer's purpose. The first is whether there is any evidence that the employer has recently taken steps to marginalise the union by downgrading the status of collective bargaining. The second relates to evidence that the offers were made to particular workers only to retain or reward their services. Of course, the tribunal may on occasion need to make difficult judgments about what was the employer's main purpose; we cannot get away from that. However, tribunals are well practised in making such judgments based on
 their experience of employment relations. The guidance given by new section 145D steers the tribunal towards the type of evidence that is important in determining an employer's purpose. I am confident that the system that we have devised is workable.
 Amendment 43 seeks to remove the burden of proof from the employer in cases in which there is a complaint under section 145B—the offering of an inducement relating to collective bargaining. That is in order to relax the responsibilities of the employer in that key regard. 
 It is obvious that employers know what their purpose is when they offer an inducement. It is only reasonable, therefore, to place the burden of proof on an employer to show what that purpose was. We have set out logical tests for how his purpose is to be decided. They ensure that where the purpose is other than one of the prohibited ones it will not be difficult for the employer to demonstrate that. I would add that a number of other statutory employment rights place the burden of proof initially on the employer. The most obvious is unfair dismissal, where the employer is required to show his reason for dismissing the employee and that he acted reasonably in dismissing the employee for that reason. The reasons for taking this approach are plain. In principle they are the same as those that make it sensible to place the burden on the employer in new section 145D. Only the employer knows what his full reasons for the dismissal were. 
 The amendments are unnecessary and go against the spirit of what we are trying to achieve. I understand where my hon. Friends are coming from with regard to ''sole or main purpose'', and we should be able to return to the definition. For now, I would ask the hon. Member for North-West Norfolk to withdraw the amendments.

Henry Bellingham: I am disappointed in some ways with what the Minister has said. He has been hard on amendments Nos. 39, 40 and 44 and we are not happy about shifting the burden of proof. In the light of what he has said, however, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Henry Bellingham: I beg to move amendment No. 42, in
clause 23, page 20, line 44, leave out 'three months' and insert '30 days'.
 New section 145C, on which I hope the Minister will touch in a moment, concerns the time limit for proceedings. It states that 
''An employment tribunal shall not consider a complaint under section 145A or 145B unless it is presented . . . before the end of the period of three months beginning with the date when the offer was made''.
 That is a long time. The last thing that one wants is vexatious claims or unnecessary recourse to employment tribunals. There is little in the Bill or in the explanatory notes to explain the origin of the three months. Why is the period so long? Rather than three months, surely it would be better to think in terms of one month. The Minister talks of wanting the 
 legislation to be focused, clear and fair to all parties. In my submission, 30 days is perfectly reasonable.

Jonathan Djanogly: I support amendment No. 42. It would decrease from three months to 30 days the time within which actions should be brought. The Bill provides that the tribunal can extend the time limit as it sees fit. With such adaptability, we believe that the initial period should be shorter. It is easy to say that there are similarities with unfair dismissal claims—they, too, have a three-month limit—but I do not think that such a similarity exists.
 There is a big difference between someone being unfairly dismissed or sacked and someone being given an inducement, or what the Minister would like to call a bribe. With respect, Mr. Stevenson, I would not call it a bribe. There is a big conceptual difference, because in the latter case there is an ongoing relationship. In other words, the employee will continue working. It is in the best interests of all parties to deal with the situation as quickly as possible, so that people can move on. That cannot be compared with unfair dismissal, as a dismissed employee would need longer to prepare a case.

Gerry Sutcliffe: I am grateful to Opposition Members for the spirit in which they have spoken to the amendments. I apologise yet again for not being able to accept them. I shall explain why.
 The amendment seeks to reduce from three months to 30 days the time in which an individual may make a claim to an employment tribunal under the new jurisdiction. The hon. Member for Huntingdon hit the nail on the head when he spoke of the time scale allowed for unfair dismissal; it applies also to flexible working and the right to be accompanied. The limit for all is three months, and we think it entirely reasonable. 
 Another reason for preferring a three-month period is that it allows a reasonable time for individuals to consider their complaint. During that period, they can decide whether their complaint is fair and sound and, if so, to undertake the preparation work needed to bring a claim. It allows time also for another critical action—to raise the issue with the employer in the hope of reaching an amicable settlement and thus avoid the need for a tribunal claim altogether. It is not in anyone's interest to curtail such a period.

John Lyons: It is important that the Minister points out the danger that tribunal work would increase if the time were reduced to 30 days. People would have to decide very quickly whether to make a complaint, and three months would give them that opportunity. He was right to say earlier that three months is a standard time limit in the complaints system. For convenience, it is important to keep it.

Gerry Sutcliffe: I entirely agree with my hon. Friend. He makes the point clearly. I would ask the hon. Member for North-West Norfolk to consider what has been said. I hope that he will accept that the amendment does not help and I ask him to withdraw it.

Henry Bellingham: It was a probing amendment. I heard what the Minister had to say. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Henry Bellingham: I beg to move amendment No. 45, in
clause 23, page 21, line 35, after 'be', insert 
 'up to a maximum of'.
 We could be knocking on an open door; at least, we live in hope. The Opposition are pro-union, not anti-union. My hon. Friend the Member for Huntingdon is pro-trade union in his heart of hearts. New section 143E states that 
''the award shall be £2,500 (subject to any adjustment of the award that may fall to be made under Part 3 of the Employment Act 2002).''
 I want to make the figure more flexible. Will the Minister explain how the figure of £2,500 was arrived at, as there is little in the notes to enlighten us? The amendment would give the employment tribunal the flexibility and freedom to decide the level of award according to the circumstances of the case. After all, some cases will be more serious than others. In some cases, it will be perfectly obvious that the employer has breached the terms of the Act and behaved unreasonably, even aggressively, and in a discriminatory way. Surely, however, there will be other cases in which the employer's behaviour has in no way been as serious as another employer's, and in which a lesser award would be more appropriate? The amendment would give the employment tribunal some flexibility.

Bill Tynan: One employer may lean towards inducement more than others, so if we want the clause to be flexible, would it not be beneficial to increase the £2,500 to something like £10,000?

Henry Bellingham: That is a matter of opinion. The hon. Gentleman can table an amendment if he so wishes. I am saying that some employers may deserve the full fine, but others will have slipped up on a technicality and do not deserve such a fine. The clause is too rigid. We need a little flexibility and I hope that the Minister will accept the amendment. He is looking fairly sympathetic and I live in hope.

Jon Cruddas: I am against the amendment, because it seeks to build in downwards flexibility and to reduce the award from £2,500, rather than to make a more flexible remedy available above £2,500. I refer to the Dave Wilson part of the Wilson-Palmer judgment in the Associated Newspapers Daily Mail case, which related to inducements made in 1989. At that time, the scale of the inducement was 4.5 per cent. of salary, which amounted to about £1,300 a year. In other words, after two years, without the addition of a pay rise, the £2,500 would be exceeded by the amount of inducement. If we want flexibility, we should not accept the amendment, but the Minister should closely examine the flexibility in the system whereby 15 years later, £2,500 would be less than two years' inducement received by Mr. Palmer in 1989. Opposition Members are approaching the issue from entirely the wrong side. The amendment should be withdrawn, and the Minister should consider the matter much more
 carefully and not close the door on it. The remedy is entirely at odds with the inducements that could be offered at today's prices.

Jonathan Djanogly: I support the amendment. Conceptually, the fixed amount of £2,500 is wrong. The clause states that the award can be
''subject to any adjustment . . . under Part 3 of the Employment Act 2002''.
 I am not entirely sure to what that relates. Am I right that that legislation has not yet come into force? Will the Minister explain to what it will relate and when it is likely to come into force? It is just stuck into the clause and it complicates the issue. There may be a situation where the inducement is a blatant bribe. The legislation provides for that. In such a circumstance, I can understand the tribunal awarding the full amount. However, as my hon. Friend said, the inducement could be marginal. Based on the Minister's own proposed wording of the main reason test, it may just tip over the balance. In that situation, it would not be fair for that employer to be charged the same amount as an employer who is being charged for blatant reasons. The clause does not provide for any flexibility; I think that it should.

Gerry Sutcliffe: The hon. Member for North-West Norfolk said that I would be sympathetic towards his case. I am not. There are a lot of reasons for the way that I look, but being sympathetic was not one of them.
 New section 145E, inserted by clause 23, specifies the remedies that tribunals can give when an employer breaches the rights contained in new sections 145A and 145B. Amendment No. 45 seeks to change those remedies significantly. Let me start by explaining the remedies that new section 145E establishes, which are various. 
 First, the tribunal must make a declaration stating that a breach has occurred. That puts the issue on the record and can be used by the union to discourage other members from accepting similar inducements. 
 Secondly, the tribunal must make a set award of £2,500. In effect, that is a fine. There was no precedent to use as a yardstick, but £2,500 is about half of the amount awarded by the European Court of Human Rights in the Wilson and Palmer case as compensation to the individuals for non-pecuniary damages. That is how we arrived at the figure of £2,500, although my hon. Friend the Member for Dagenham clearly makes the case for why that should be more significant. We believe that the fine would act as a significant deterrent to employers, especially in circumstances where many workers are offered inducements and could potentially make a claim. We also provide that any unlawful inducements received by the complainant do not need to be returned. Therefore, the total cost to the employer of his unlawful behaviour could mount up, which again adds to the deterrent effect of the system of remedies. 
 Thirdly, the £2,500 award will not be offset against any awards of compensation made under section 146 of the 1992 Act, which relates to detriment of trade 
 union-related rights. That arrangement ensures that a union member who refused an offer could receive the full £2,500 under the new jurisdictions and compensation under section 146 equal to the value of the inducement taken by others. It also ensures that the law treats those who refused the bribe and those who accepted it equally. 
 Fourthly, the remedies ensure that employers cannot enforce an agreement to make a contractual change where an unlawful inducement was offered. The amendment changes the set award of £2,500 to a variable one to be set by the tribunal up to a maximum of £2,500. The tribunal can therefore award anything it thinks fit between nothing and that maximum. The amendment does not state what factors the tribunal should take into account when setting the award. I suspect that that is a defect in the wording of the amendment. 
 We think that £2,500 is a reasonable deterrent; that is why we set that figure. It gives a clear signal in the law that such abuses are unacceptable. A variable award would send entirely the wrong message. Indeed, if an award were set simply at a level to compensate pecuniary loss, it might be very small indeed. The deterrent effect on employer behaviour would be minimal. 
 On the point made by the hon. Member for Huntingdon, the October 2004 regulations have been laid and they deal with the application of the statutory procedures. The Commons will be debating those shortly. 
 I ask the hon. Member for North-West Norfolk to reflect on his amendment and to withdraw it.

Henry Bellingham: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Henry Bellingham: I beg to move amendment No. 46, in
clause 23, page 22, line 2, at end insert— 
 '(5A) Employers shall have the right to appeal against any decision by an employment tribunal to the employment appeals tribunal.'.
 Amendment No. 46 simply inserts a new subsection into proposed new section 145E. Presumably, employers have that right of appeal in any event. Can the Minister clarify that? If they do not, they should. Can the Minister explain what rights of appeal the employer has if he cannot go to the appeals tribunal?

Gerry Sutcliffe: I cannot quarrel with the hon. Gentleman's intention to ensure an appeal right in respect of the important new rights that the Government seek to introduce under the clause. After all, when we come to clause 28, we shall see that it is possible for appeal rights to be overlooked when legislating. I offer him the reassurance that he seeks by pointing out that existing legislation already provides for a right of appeal to the Employment Appeal Tribunal on clause 23 rights. That is not in the Bill, but the effect of inserting the relevant rights into the 1992 Act is to apply a right of appeal automatically. Under section 21(1) of the
 Employment Tribunals Act 1996, an appeal lies to the EAT on any question of law arising from the decision of a tribunal under the 1992 Act.

Jonathan Djanogly: Will the Minister clarify that the right of appeal would be either way?

Gerry Sutcliffe: The appeal right applies both to individual claimants and to employers, entirely as it should. Like other rights of appeal to the EAT under employment legislation, that right provides for appeals only on a point of law. It is not for the EAT to establish the facts of a case, which is what employment tribunals do. The EAT's role is rather different—to consider whether a tribunal has correctly applied the law.
 I quarrel with the nature of the appeal right that the amendment seeks to introduce. For one thing, it applies only to employers, which may undermine the ability of workers or employees to appeal. I am not sure that that was a deliberate intention. In addition, the amendment would give a wider role to the ETA than exists elsewhere in employment legislation, which is not desirable. Those points are technical, but I hope that the hon. Member for North-West Norfolk will accept the spirit of what we are trying to achieve and therefore withdraw the amendment.

Henry Bellingham: I am grateful to the Minister. Being told that the Bill does what one is trying to achieve anyway is as good as having one's amendment accepted, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Question proposed, That the clause stand part of the Bill.

George Stevenson: Before we start the debate, may I ask hon. Members to assist the Chair in not rehearsing the arguments that we had in our quite general debate on the first group of amendments? Clearly, the clause is important.

Henry Bellingham: It is obvious that the Government had to address the Wilson and Palmer cases. However, as the Committee has seen from our amendments, there are some real concerns. I ask the Government to go back, not to the drawing board, but to have another go at drafting the Bill, because we do not feel that they have got it right. There are serious concerns about the reversal of the burden of proof, as well as about other issues, which is why we shall divide on the clause. The Government have certainly tried to address Wilson and Palmer, but they have not done so in entirely the right way. They should have another go.

Jon Cruddas: Briefly, I will not cover the points that I made earlier about the remedies. As hon. Members have said, the issues are complex. I should like to raise some points about the Wilson and Palmer cases. In the Palmer case—the docks case—the employer's response was that what had been done was not an inducement against the union and had nothing to do with union membership but was an inducement to fashion flexibility at work. The ''sole or main'' provisions could still allow a certain flexibility of interpretation that undermined the rational objective of the entirety of the proposals. I welcome the fact that the Minister will keep the provision under constant scrutiny to ensure that the objective is not undermined by a particular interpretation of ''sole or main purpose''.
 It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.